Six months after launch, the vision of iGaming Ontario (iGO), the entity that manages Ontario’s burgeoning online gaming market, has begun to shift to a longer-term focus.
Martha Otton, the executive director of iGO, spoke with VIXIO GamblingCompliance last week about the opening months of the privately-operated online gaming market, and what the future holds for online gaming in Ontario.
“Up until very recently, [the focus has] been to launch,” Otton told VIXIO in an interview at the Global Gaming Expo (G2E) in Las Vegas. “Now, we say we want to be leaders in the world’s best gaming markets.”
iGO serves as the entity tasked with conducting and managing online gaming in Ontario in order to make a de facto licensing system compliant with Canadian federal law, while the Alcohol and Gaming Commission of Ontario (AGCO) is the regulator in charge of promulgating standards and enforcement actions.
Operators need both a registration with the AGCO and an operating agreement with iGO to launch in the province.
The province has 25 operators live in its competitive online market and October will see more join, as the AGCO has set a deadline of October 31 for operators to complete the transition from the Ontario grey market into the regulated space without facing penalties that would include being forced to cease operations.
“There are still a lot of operators to be onboarded, so we can't let go of that focus on bringing those operators who want to come into the market, and the October 31 deadline has given a lot of impetus to operators who are on that path, so October’s a busy month, to be sure,” Otton said.
“It’s a challenge for us, because we’re still onboarding and we’ve got regular business as well,” she added.
“Pre-April, it wasn’t like we were getting regular deposits and doing all that reconciliation, so now we’re functioning, but we need to look longer term than in the next six weeks, and that’s what we’re putting our minds to, what’s the future of the gaming market and how do we continue to succeed.”
Otton said that iGO is ahead of where it thought it would be at this point in converting operators from the pre-existing grey market into regulated operators.
“We’re figuring out how big the market is, and you don’t know how many channels until you know how big the market is, but definitely the revenue numbers are more than we were anticipating,” she said.
Otton added that iGO also appreciates the diversity of the operators coming into the market, including a mix of Canadian, American and European companies.
“I think that may also be a challenge for us and the market going forward; how do we keep that diversity? I hear a lot of things around a small number of operators dominating, and I think that if we want to be that world’s best jurisdiction, we have to be open to innovators too.”
In the early months, some operators have grumbled about AGCO’s decision to allow existing grey market operators to freely transfer into the regulated space, arguing it gave the a clear advantage to those companies with existing player bases in Ontario.
“I think there were some advantages, because you come with a player base, but those operators had to move that player base into a system that met our standards, with know-your customer and all those sort of things, the transition of players was not a simple task for those who had a database,” Otton said when asked about the perception of an advantage for those operators.
“So yes, great, they’ve got a group of loyal players, but then starting fresh, it’s kind of a clean slate, you can sign players up, and you’ve got the system right from day one.
“I think there are advantages to both systems going forward,” she added. “[Operators] are actively in a mode to obtain and retain players, so my impression is players are checking out various sites, and they’re willing to place a bet somewhere else if they see an opportunity there.”
Some have also complained that restrictions on offering bonus inducements in advertising have impeded the ability of some operators to gain market share and hurt the market as a whole.
“I don’t actually think it’s hurt us at all,” Otton said. “I think we’re likely seeing less bonusing than other jurisdictions because they can’t advertise them, but really, the AGCO’s intent was to address some of that responsible gaming function, so my view is it’s been successful.”
Among the biggest hurdles for converting grey market operators into the regulated space, Otton said, is integrating systems in order for iGO to fulfill its legal requirements regarding anti-money laundering (AML) provisions.
“A lot of the grey operators are large and sophisticated corporations, and they’re pretty prepared to deal with our requirements,” she said. “We want to be as commercially friendly as possible, but we have AML reporting responsibilities, so we have a fairly thorough AML process.
“We’re exchanging data on a regular basis, and so we need to integrate our systems into the operator’s systems, so it’s just that IT testing component.”
In addition, she said data integrity was another issue that iGO was working through with operators.
“I don’t think it’s unusual for this type of industry, but really important for us that we’re getting it right,” Otton said.
“We’re dealing with 25 operators currently, and so we’re really focused on ensuring what we mean by each data field, and there’s been some surprising interpretations.”